Uranium Projections Give This Cameco Analyst A Certain Glow

Declining global uranium inventory levels may lend upside support to Cameco Corp.’s CCJ stock, according to BMO Capital Markets.

The Cameco Analyst: Alexander Pearce upgraded the rating for Cameco to Outperform, while raising the price target to C$42 (U.S.$33.63).

The Cameco Thesis: The uranium price forecasts for 2022 and 2023 have been raised by 13% to the average U.S.$51 per pound and by 3% to U.S.$46 per pound, respectively, Pearce said in the upgrade note.

“This drives a modest increase in near-term cash flow for the company, with our 22/23 attributable EBITDA estimates now C$420/608M up 10/3% respectively,” he added.

“In a sector with a limited number of listed producers, Cameco's stock trades on sentiment more than most. Thus, with momentum for low carbon nuclear generation continuing to build and security of supply an increasingly important factor for utilities/governments, we think Cameco's advantageous geographical production base and its position as the largest and most liquid uranium stock means there should be further upside to its stock price,” the analyst wrote.

CCJ Price Action: Shares of Cameco had risen by 5.81% to $29.70 at the time of publication Thursday afternoon. 

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